Britain is the only country in the European Union not to have some form of minimum wage, guaranteeing workers a basic rate of pay. Labour has promised one but has not answered the question of at what level it should be set. It has to strike a balance between a rate so high it will destroy jobs and a rate so low it will do little to relieve poverty.
Income Data Services say the level is unlikely to be below the previous minimum rates set for different industries by the wages councils, abolished four years ago. The report says that increasing the minimum wages for the clothing and retailing industries in line with inflation would give a rate of between£3 and£3.49 an hour.
Unless the minimum wage is set substantially above that the unions could be angered. The TUC has been pushing for a rate of half average male earning or£4.26 an hour.
The new minister with responsibility for introducing the minimum wage, Ian McCartney, said details would follow from the Low Pay Commission. He said there was a strong business case for a minimum wage because firms were competing in a 'contract culture' on the basis of lowest costs not on quality of services provided.